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Chestnuts (American Lorain) and
Chinese reverse mergers
The Chestnut – she’s a fickled beast
China’s
a’
world’
Current World Annual Chestnut
Production (~ 1 Million Tons)
South
Korea, 9%
Italy, 5%
Japan, 3%
13%
63%,
~600k tons
Current World Annual Chestnut
Cons um ption
South
Korea, 4%
The Rest
Asia, 11%
The Rest
World, 9%
China’s
Chinese Citizens Consum e Less Packaged Food
1000
1200
States
Africa
80%
100%
Packaged Food Consumption
Fresh Food Consumption
valuation based on P/E
Under what circumstances is this a good valuation
model? (assume the EPS of 62 cents/shr)
when is P/E = 9 the right answer?
(1+.16)/.16 = 7.25.
need more growth in RI (need summation = .24)
did analyst forecast such growth from 2010 to 2011?
P0
E0
=1+r
r1+DRIt
(1+r)tE0
t=1
¥
å
æ
è
ç ö
ø
÷ -D0
E0
implied assumptions about RI growth
from analyst report
ΔRI = .1224 - .0808 = .0416.
ΔRI/E2009 = .0416/.55 = .0756
ΔRI/E in perpetuity = .0756/.16 = .47.
reserve-engineering the margins
reverse engineering the interest,
